This short guidance booklet is designed to provide vital support to those facilitating and to those attending industry gatherings such as trade conferences, industry working groups and roundtables.
- a brief explanation of why it is commercially beneficial to establish appropriate safeguards for such discussions from the outset; (and this is not least because to do so ensures that the entirely valid and legitimate objections of such gatherings are not reputationally or otherwise undermined by perceptions or commissions of unlawful collective activity); and
- some important practical advice on how to set in place the best safeguards to protect these objectives and ensure that they are successfully achieved.
Competitors are required by law to compete independently of each other. Disclosures of competitively sensitive data (think 'business secrets') between two or more rival businesses reduce that independence.
There is close relationship between disclosures of business secrets and cartel activity: no cartel can survive without the participants exchanging sensitive information. Anywhere that competitors come together, there may be a suspicion regarding their motives. Even a single disclosure (i.e not even an exchange), that is voluntarily offered, can be sufficient to land all those receiving it in trouble.
This is why exchanges of competitively sensitive information are commonly the first step on the slippery slope to even worse legal infringements. So how can you spot what is problematic and protect yourself?
Always ask yourself:
(1) Would your board be happy to see what you're about to say on the front page of tomorrow's papers? If the answer is no, then the content of your proposed disclosure is probably a business secret and it should remain secret
(2) If the information in question could not be easily discovered by the ordinary person on the high street who has no particular expertise or special access permissions, again, the information in question is probably a business secret and it should stay secret
(3) If you have already met steps 1 and/or 2, step 3 is almost always met and if so, the law has been broken
Examples of business secrets/competitively sensitive information
- Terms with suppliers
- Investment spend
- Risk assessments
- Sales strategy
- Customer lists
- Employee names
- HR strategy
- Unpublished IP, know-how or proprietary technological data
- New business development plans
- Individual terms of customer relationships
- Output/production strategy
These are key areas to watch out for but this doesn't mean information on these topics can never be discussed, relied on or obtained. A lot of the information listed above may be available to varying levels of detail in company reports or press briefings. So apply common sense to the above topics, check the steps on the slippery slope and if something still worries you after that, get advice before disclosing, or exposing yourself to disclosures of, anything that you are not sure about.
Specific guidance for the meeting
1. Focus: All discussions should focus purely on the topic of whether it is desirable to form an established association for the stated objectives.
2. No individual attendees' business secrets should be disclosed, and neither should any individual be offered any incentive to disclose any business secrets: For these purposes, except at a very high level, this will include disclosures of any individual business' strategic thinking in this area. It will also include at any level of detail (except as already published), individual business' plans for recruitment and HR strategic thinking and in particular how these could affect that individual business' overall business strategy and their position in the market.
3. Asking questions: Asking legal, logistical or factual questions relating to the general proposals and approaches being discussed and/or implemented within the industry, or indeed making suggestions in relation to the same, should not give rise to risk, provided that subsequent discussion does not lead (i) into attendees revealing strategic viewpoints or other competitively sensitive information, or (ii) into attempts to unlawfully exclude competitors and/or other relevant parties (see further below). All attendees should be granted equal access to any presentation materials and equal opportunity to ask questions in respect of it. You may want to consider whether it is possible for questions to be submitted anonymously and/or in advance if there are concerns that the identity of the questioner, when coupled with the query posed, might signal something competitively sensitive.
4. Decisions/agreements reached: Any conclusions reached by those present should be strictly related to the stated objectives of the gathering. In relation to managing any risk profile arising from both the gathering itself and any conclusions reached, it may be important to consider:
Who will participate in the outcome of the conclusions? Care should be taken to ensure that subsequent access to the discussions and any conclusions is fair and reasonable. For example, if a proposal to establish an industry-wide approach is approved by those attending a meeting, subsequent attendance at future meetings discussing the same and participation in the approved approach should be open to all those whose business is relevant and may benefit from or be affected by the proposal. Genuinely objective criteria can be designed and circulated in order to determine legitimately whether participation will be relevant for a particular individual's business.
Any exclusions of participation should be carefully checked to ensure that they will be robust and defensible.
5. Minutes: Clear and contemporaneous minutes should be taken. Ideally, the minutes should be legally reviewed in draft ahead of circulation for adoption in agreed final form by the attendees.
9 tips for meeting with competitors
It is equally important to manage both the actual risk and the perceived risk of competition law infringement. Such risks cannot be managed effectively, if the following safeguards are adopted:
1. If possible, the meeting should take place in a neutral venue.
2. Legal counsel should ideally be present to perform the role of 'friendly watchdog' and to monitor proceedings at all times. In this way, the counsel can safely but non-disruptively assist members in ensuring that legal boundaries are not inadvertently overreached. (Note that the presence of such counsel does not grant legal privilege protections).
3. An agenda clearly identifying proposed discussion content should be legally reviewed and subsequently circulated in advance of the gathering.
4. The agenda should contain a brief warning to all intended recipients and attendees about the competition law risk in straying into disclosures or exchanges of competitively sensitive data (i.e business secrets).
5. Ideally (in order to avoid any awkwardness as well as to manage legal risk) the content of any proposed presentations should also have been passed by the presenters' own legal counsel.
6. At the start of the meeting, and before any substantive discussion commences, the chairperson should remind all present that the competition rules must be adhered to, and that this means no exchanges of individual publishers' non-published data can take place. All present should be asked to show their agreement. A minute of this reminder and the agreement of all present to adhere to the competition law rules should be recorded.
7. Minutes of the meeting should be produced, approved by legal counsel present and circulated to all attendees once finalised.
8. During the meeting, if any attendee is in any doubt about the appropriateness of a line of discussion, or where it might lead, that attendee should immediately raise a query as to whether the discussion might continue unless all present, including the legal counsel are satisfied that the discussion is not legally problematic, the conversation should not be permitted to continue.
If the conversation does continue and the attendee remains uncomfortable, they may immediately excuse themselves, request a minute of their absence from the room and seek guidance from their own company's legal counsel as to whether or not there might be a problem returning to the discussion.
9. Following the meeting, attendees should ensure that social interactions do not lead to inappropriate discussions of competitively sensitive topics that care was taken to avoid discussing during the meeting.
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